China promotes 'triple-win' opening scheme for its banking sector

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Last updated at: (Beijing Time) Tuesday, December 02, 2003

China promotes 'triple-win' opening scheme for its banking sector

China decides Monday to lift restriction of the equity share for a single foreign bank to participate a joint bank from 15 percent to 20 percent.

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China decides Monday to lift restriction of the equity share for a single foreign bank to participate a joint bank from 15 percent to 20 percent.

The move, expected by the country's banking regulator, will cultivate competition as well as cooperation to create "triple win" conditions for Chinese and foreign banking players.

Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), addressed at a press conference held here Monday that more involvement of foreign banks would help improve their Chinese counterpart's corporate structure and optimize theirmanagement.

He said China encourage foreign banks to hold more shares of Chinese domestic banks, aiming at introduce more competition as well as cooperation among Chinese and foreign banks.

China so far has allowed foreign banking institutions participated in five Chinese share-holding or urban commercial banks.

The natural purpose to run a bank is to attract customers as many as possible by high-quality service, and competition would help improve the service, said Liu, who is also the former governor of the Bank of China.

Liu said the move to further open China's banking sector would enable foreign banks to acquire more market shares, help Chinese banks to learn advanced experience of foreign banks to increase their competitiveness, and last but most important, the customers would enjoy better banking services.

"In my words, it is a win-win-win formula for both Chinese and foreign banks and their customers", Liu said, noting that China expects to see its banking sector improved by the opening scheme.

Since the start of this year, the CBRC has altogether approved the establishment of 28 foreign bank representative offices, 12 foreign bank branches and six foreign bank representative offices, 12 foreign bank branches and six foreign bank sub-branches, and authorized 48 foreign banks to conduct RMB business.

At the end of October, according to the latest statistics by the CBRC, foreign banks had 46.6 billion dollars of combined assets and outstanding loans amounting to 21.7 billion dollars including 16.4 billion dollars in foreign currency. Their assets have jumped a year-on-year 29.7 percent in the first ten months ofthe year.

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